Africa’s startup ecosystem is experiencing a strong start in 2025, with total funding reaching $289 million in January. This marks a remarkable 240% increase compared to the same period in 2024, when startups across the continent secured $85 million.
A Strong Start for the Year
According to Africa: The Big Deal, a funding tracker, this performance makes January 2025 the second-best January for startup investments since at least 2019. It trails only January 2022, which saw a surge in venture capital during the peak of Africa’s funding boom.
Equity Funding Dominates
The report also highlights that equity financing accounted for over 90% of the total funding, with $262 million raised. This figure marks a significant jump from the previous year and represents the second-highest January for equity fundraising in the last six years.
Leading Markets Secure Major Deals
The four largest funding rounds in January 2025 came from Africa’s biggest startup hubs—Nigeria, Kenya, Egypt, and South Africa. Collectively, these markets attracted about 60% of all investments on the continent.
Key deals include:
- PowerGen (EnergyTech): Raised over $50 million to scale renewable energy solutions.
- LemFi (Fintech): Secured $53 million to expand into Asia and Europe.
- Naked (Insurtech): Closed a $38 million Series B round to enhance automation and product offerings.
- Enko Education (EdTech): Obtained $24 million to grow its network of schools across Africa.
Notably, three of these companies have plans to expand beyond Africa, reflecting a growing trend of African startups seeking global opportunities.
A Promising Outlook for 2025
Industry experts believe this surge in funding signals renewed investor confidence, following two challenging years in 2023 and 2024. In 2024, African startups raised just $1.5 billion, accounting for less than 1% of global venture funding.
Davidson Oturu, General Partner at Nubia Capital, emphasized that Nigerian startups have strong potential to secure more investment this year.
“The funding landscape is shifting, and while foreign investors remain key players, economic uncertainties may make them more selective. Startups must showcase scalability, strong business fundamentals, and real-world impact to attract capital,” Oturu stated.
